Startup Assistance

Part of the Brewers Association of Maryland’s mission is to help new breweries through the licensing and startup process. We encourage startups to join BAM and begin networking with the industry, benefit from the legal and regulatory advice and BAM’s marketing programs.

Federal & State License Info

Before any commercial production begins, a startup brewery must either obtain federal and state licensing (if they wish to brew the beer themselves), or contract with an existing brewery to produce beer. Beer brewed prior to the issuance of a state license cannot be sold (i.e., everything prior to licensure is non-commercial). All breweries must have the following before producing their first beer:

This article from an attorney who works almost exclusively with craft beverage producers also offers good tips on navigating the TTB application process.

BAM can be very helpful for member startups by assisting in the planning/zoning process. Click on the sections below to reveal the details of each State of Maryland manufacturing license. Contact BAM if you have questions about the laws.

Class 5M – Production Brewery

The Class 5 Brewery license is meant to be predominantly a brewing facility, with limited accommodation of the public on-site. The M5 (= manufacturer Class 5) is allowed to brew an unlimited amount of beer, and has the following restrictions/allowances:

$1,500 fee, annual;

Provide up to 6, 3-oz samples to visitors who have participated in a guided tour or who are attending a promotional event;

Sell up to 288-oz of beer per person for off-premise consumption (“to go”) to persons who have participated in a guided tour or who are attending a promotional event;

Sell growers to go in 32-oz up to 128-oz containers;

Obtain a special event permit for up to 12 events per year at which beer brewed on site may be sold by the glass;

Obtain a county-issued permit for on-premise consumption of up to an aggregate 500 barrels per year;

May obtain a distribution license to wholesale up to 3,000 barrels of beer annually if the licensee produces less than 22,500 barrels annually.

(1) There is a Class 8 farm brewery license.
(2) Subject to paragraph (3) of this subsection, a Class 8 farm brewery license allows the licensee to sell and deliver beer manufactured in a facility on the licensed farm or in a facility other than one on the licensed farm to:

(i) A wholesaler licensed to sell and deliver beer in the State; or
(ii) A person in another state authorized to acquire beer.

(3) The beer to be sold and delivered under paragraph (2) of this subsection shall be manufactured with an ingredient from a Maryland agricultural product, including hops, grain, and fruit, produced on the licensed farm.
(4) A Class 8 farm brewery may be located only at the place stated on the license.

(5) Notwithstanding any local law, a licensee may exercise the privileges of a Class 8 farm brewery license.
(6) A licensee may:

(i) Sell beer produced by the licensee for consumption on the licensed farm;
(ii) In an amount not exceeding 6 fluid ounces per brand, provide samples of beer that the licensee produces to a consumer:

1. At no charge; or
2. For a fee; and

(iii) Sell or serve:
1. Bread and other baked goods;

2. Chili;
3. Chocolate;

4. Crackers;
5. Cured meat;

6. Fruits (whole and cut);
7. Salads and vegetables (whole and cut);

8. Hard and soft cheese (whole and cut);
9. Ice cream;

10. Jelly;
11. Jam;

12. Vinegar;
13. Pizza;

14. Prepackaged sandwiches and other prepackaged foods ready to be eaten;
15. Soup; and

16. Condiments.
(7) Subject to subsections (d) and (e) of this section, a licensee may exercise the privileges of the license each day during the following times:

(i) From 10 a.m. to 6 p.m., for consumption of beer and sales and service of food at the licensed farm; and
(ii) From 10 a.m. to 10 p.m., for:

1. Sampling of beer;
2. Consumption of beer off the licensed farm if the beer is packaged in sealed or resealable containers, such as growlers; and

3. Guests who attend a planned promotion event or other organized activity at the licensed farm.
(8) (i) Except as provided in subparagraph (ii) of this paragraph, a Class 8 farm brewery license allows the licensee to operate 7 days a week.

(ii) In Garrett County, a licensee may open on Sundays during the hours allowed under § 11-512(c)(3) of this article to engage in the activities listed in paragraph (3) of this subsection only in an election district or a precinct in an election district where the voters, in a referendum authorized by law, have approved Sunday sales at a farm.
(9) Except as provided under subsection (d) of this section, a licensee may not sell or allow to be consumed at the location of the farm brewery any alcoholic beverage other than the beer produced by the licensee under the authority of this section.

(10) Nothing in this subsection limits the application of relevant provisions of Title 21 of the Health – General Article, and regulations adopted under that title, to a licensee.
(b) Place listed on license to be in compliance. — The place listed on the Class 8 farm brewery license shall be in compliance with § 9-103 of this article.

(c) Scope of license. — A licensee may:
(1) Store on its licensed farm, in a segregated area approved by the Comptroller, beer produced at the licensed farm for sale and delivery to a wholesaler licensed in the State or a person outside of the State authorized to acquire the beer;

(2) Brew, bottle, or contract for not more than 15,000 barrels of beer each calendar year;
(3) Contract with the holder of a Class 2 rectifying license, a Class 5 brewery license, or a Class 7 micro-brewery license to brew and bottle beer from ingredients produced on the licensed farm;

(4) Import, export, and transport its beer in accordance with this section;
(5) Store beer at a warehouse for which the licensee has been issued an individual storage permit, for sale and delivery to a wholesaler licensed in the State or a person outside of the State authorized to acquire the beer, or shipment back to the licensed farm, if:

(i) The licensee does not serve or sell beer at the warehouse; and
(ii) The Comptroller has full access at all times to the warehouse to enforce this article; and

(6) Enter into a temporary delivery agreement with a distributor only for delivery of beer to a beer festival or wine and beer festival and the return of any unused beer if:
(i) The beer festival or wine and beer festival is in a sales territory for which the holder does not have a franchise with a distributor under the Beer Franchise Fair Dealing Act; and

(1) A licensee may sponsor a multibrewery activity at the licensed farm that:
(i) Includes the products of other Maryland breweries; and

(ii) Provides for the sale of beer by the glass for consumption on the premises only.
(2) In a segregated area approved by the Comptroller on the licensed farm, a licensee may store the products of other Maryland breweries for the multibrewery activity.

(3) The multibrewery activity:
(i) May be held from 10 a.m. to 10 p.m. each day; and

(1) The Office of the Comptroller may issue a special brewery promotional event permit to a licensee.
(2) At least 15 days before holding a planned promotional event, the licensee shall obtain a permit from the Comptroller by filing a notice of the promotional event on the form that the Comptroller provides.

(3) The permit authorizes the licensee to conduct at the licensed farm a promotional event at which the licensee may:
(i) Provide samples of not more than 6 fluid ounces per brand to consumers; and

(ii) Sell beer produced by the licensee to persons who participate in the event.
(4) The beer at the event shall be sold by the glass and for consumption on the premises only.

(5) The licensee may not be issued more than 12 permits in a calendar year.
(6) A single promotional event:

(i) May be held from 10 a.m. to 10 p.m. each day; and
(ii) May not exceed 3 consecutive days.

MD Franchise Law

(a) Declaration of policy. — It is the declared policy of the State of Maryland that it is necessary to regulate and control the agreements, franchises and relationships between manufacturers of beer and their distributors for the purpose of fostering and promoting temperance in the consumption thereof, and to promote respect for and obedience to the laws controlling the distribution and sale of beer. It is necessary to accomplish the declared policy in order to eliminate the undue stimulation of sales of beer in this State by manufacturers inducing, coercing, or attempting to induce or coerce, distributors of beer to do acts detrimental to the orderly and lawful distribution thereof by threatened or actual termination of the manufacturer and distributor relationship, directly or indirectly, by the establishment of dual distributors of a brand or brands thereof in a territory presently served by a distributor, or by the sale of the same brand or brands in one territory by more than one franchisee. It is the further declared policy of the State of Maryland that temperance and obedience to the laws controlling the distribution and ultimate sale of beer is promoted by legislation encouraging distributors of beer to make investments in their facilities to serve retail licensees by protecting them against the termination of such distributorships, or other acts described herein, without good cause for such termination or other such acts. The General Assembly further recognizes the distinction between the nature of the distribution of beer and other alcoholic beverages in that distributors of alcoholic liquors other than beer are franchised by manufacturers to distribute many brands of various kinds of alcoholic beverages and are not as vulnerable to the economic pressures of the manufacturers as are beer distributors, which traditionally handle mainly one, two or three brands of beer in their distributorships.

(b) Definitions. — As used in this title and unless otherwise required by the context:

(1) “Franchise” or “agreement” shall mean one or more of the following: (i) a commercial relationship between a beer distributor and a beer manufacturer of a definite duration or indefinite duration, which is not required to be evidenced in writing; (ii) a relationship whereby the beer distributor is granted the right to offer and sell the brands of beer offered by the beer manufacturer; (iii) a relationship whereby the beer distributor, as an independent business, constitutes a component of a beer manufacturer’s distribution system; (iv) a relationship whereby the beer distributor’s business is substantially associated with the beer manufacturer’s brand, advertising or other commercial symbol designating the beer manufacturer; (v) a relationship whereby the beer distributor’s business is substantially reliant on the beer manufacturer for the continued supply of beer; and (vi) a written or oral arrangement for a definite or indefinite period whereby a beer manufacturer grants to a beer distributor a license to use a trade name, trademark, service mark, or related characteristic, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, or otherwise.

(2) “Franchisee” means any beer distributor to whom a franchise or agreement as defined herein is granted or offered or any beer distributor who is a party to a franchise or agreement as defined herein.

(3) “Franchisor” means any beer manufacturer who enters into any franchise or agreement with a beer distributor or any beer manufacturer who is a party to a franchise or agreement as defined herein.

(4) “Beer distributor” shall mean any person importing or causing to be imported into this State, or purchasing or causing to be purchased within this State, any beer for sale or resale to retailers licensed under this article without regard to whether the business of such person is conducted under the terms of a franchise or any other form of an agreement with a beer manufacturer or manufacturers.

(5) “Beer manufacturer” means every brewer, fermenter, processor, bottler or packager of beer located within or without the State of Maryland, or any other person whether located within or without the State of Maryland who enters into a “franchise” or an “agreement” with any beer distributor doing business in the State of Maryland.

(6) “Person” means a natural person, corporation, partnership, trust, agency, or other entity as well as the individual officers, directors and other persons in active control of the activities of each such entity.

(7) “Territory” or “sales territory” shall mean the area of sales responsibility designated by any agreement or franchise between any franchisee or franchisor for the brand or brands of any franchisor or any beer manufacturer.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15.

§ 17-102. Unlawful inducements or threats by manufacturer; failure or refusal to fill distributor’s order

No beer manufacturer shall (1) induce or coerce, or attempt to induce or coerce, any beer distributor to accept delivery of any alcoholic beverage, any form of advertisement, or any other commodity, which shall not have been ordered by the beer distributor; (2) induce or coerce, or attempt to induce or coerce, any beer distributor to do any illegal act or thing, or do any other act unfair to the beer distributor, by threatening to cancel, terminate, or refuse to renew any beer franchise existing between a beer manufacturer, or representative thereof, and a beer distributor; (3) fail or refuse to deliver to a beer distributor having a franchise, or agreement, any beer publicly advertised by it or its agents for immediate sale promptly after such beer distributor’s order shall have been received.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15.

§ 17-103. Termination or refusal to renew franchise

(a) Applicability. — This section does not apply to temporary delivery agreements under § 2-208(c)(1)(vi) of this article regarding beer festivals or wine and beer festivals.

(b) Good cause requirement. — Notwithstanding the terms, provisions or conditions of any agreement or franchise, no franchisor shall cancel, terminate or refuse to continue or renew any beer franchise, or cause a franchisee to resign from a franchise, unless good cause exists for termination, cancellation, nonrenewal, noncontinuation or causing a resignation; provided, that good cause shall exist if a franchisee’s license to do business in the State is revoked under any provisions of this article.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15; 1998, ch. 641.

§ 17-104. Notice of intended termination or nonrenewal

(a) Applicability. — This section does not apply to temporary delivery agreements under § 2-208(c)(1)(vi) of this article regarding beer festivals or wine and beer festivals.

(b) Notice requirement. — Except as provided in this section, a beer manufacturer shall provide a franchisee at least 180 days prior written notice of any intent to terminate, cancel or nonrenew any franchise agreement. The notice shall state all the reasons for the intended termination, cancellation, or nonrenewal. The franchisee shall have 180 days in which to rectify any claimed deficiency. If the deficiency shall be rectified within 180 days of notice, then the proposed termination, cancellation or nonrenewal shall be null and void and without legal effect. The notice provisions of this section shall not apply if the reason for termination, cancellation or nonrenewal is insolvency, the occurrence of an assignment for the benefit of creditors, or bankruptcy.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15; 1998, ch. 641.

§ 17-105. Establishment of dual distributorships — Same territory

No franchisor, who shall designate a sales territory for which any franchisee shall be primarily responsible or in which any franchisee is required to concentrate its efforts, shall enter into any franchise or agreement with any other beer distributor for the purpose of establishing an additional franchisee for its brand or brands of beer in the territory being primarily served or concentrated upon by a licensed franchisee.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15.

§ 17-106. Sale or delivery outside territory

No franchisee who shall be granted a sales territory for which the franchisee shall be primarily responsible or in which the franchisee is required to concentrate its efforts shall make any sale or delivery of beer to any retail licensee whose place of business is not within the territory granted to the franchisee.

HISTORY: 1974, ch. 877; 1989, ch. 5, § 15.

§ 17-107. Distributor’s right of action

Any beer distributor or franchisee may bring an action against a beer manufacturer, franchisor, or franchisee for violation of this subtitle in any court of general jurisdiction in the State of Maryland to recover damages sustained by reason of any violation of this subtitle and, where appropriate, shall be entitled to injunctive relief. The beer distributor or franchisee, if successful, shall also be entitled to the costs of the action including but not limited to reasonable attorney’s fees.

HISTORY: 1974, ch. 877; 1975, ch. 819; 1989, ch. 5, § 15.

Pick up a copy of our new Brew Pub Magazine at a member brewery, click the magazine or here to view.